January 10, 2023 10:00 AM<\/span>
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The 41st annual J.P. Morgan Healthcare Conference continues for its second day at the Westin St. Francis hotel in San Francisco, where a veritable who\u2019s who of the healthcare industry is gathered to talk pricing, patients, public policy and much more. Modern Healthcare will be providing live updates throughout the four-day event.<\/em><\/p>\n

For more from the conference, check out:<\/i><\/p>\n

Day 1<\/i><\/a><\/li>\n
Day 3<\/i><\/a><\/li>\n<\/ul>\n
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7:45 p.m. CT: Health Catalyst shifts focus<\/p>\n<\/div>\n
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Health Catalyst has pivoted its strategy as its health system customers focus less on long-term return on investment.<\/p>\n
\u201cWe’ve needed to shift away from the parts of our portfolio that deliver a long-term, clinical improvement objective or long-term ROI, and focus much more specifically on near-term, hard-dollar financial improvements,\u201d CEO Dan Burton said.<\/p>\n
Anything that can\u2019t help relieve financial pressures is off the table, CEO Dan Burton said. \u201cWe have to meet them where they are at,\u201d he said. \u201cThey\u2019re in a near-term hell.\u201d<\/p>\n
As part of it strategy, the healthcare data analytics and services company is expanding its outsourcing services relationships with health systems. In December, the company said it was partnering with Urbana, Illinois-based health system Carle Health to provide tech-enabled managed services in the areas of analytics, data management, reporting and project management.<\/p>\n
The agreement also transfers employees of Carle Health\u2019s clinical and business intelligence functions to Health Catalyst. Burton said it was a \u201ckinder\u201d version of outsourcing as the employees will stay local.<\/p>\n
Health Catalyst will turn a profit this year, Burton said. The company\u2019s goal is to generate a profit margin of 10% by 2025 through revenue streams such as outsourcing contracts and by cutting operating expenses, Chief Financial Officer Bryan Hunt said.<\/p>\n
\u2014Gabriel Perna<\/em><\/p>\n
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5:45 p.m. CT: Cigna raises premiums after \u2018tough negotiations\u2019<\/p>\n<\/div>\n
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Cigna implemented a small premium adjustment this year to account for rising labor costs among providers, CEO David Cordani said.<\/p>\n
\u201cThese are tough negotiations, back and forth, make no doubt about it, because the employer on the backend cannot afford perpetual rate increases,\u201d Cordani said.<\/p>\n
Cigna\u2019s employer-sponsored insurance business, which represents 85% of its revenue, is growing, Cordani said. \u201cWe\u2019ve been in net shared gains in the commercial space, net growth and margin expansion, which is a difficult thing to do,\u201d Cordani said.<\/p>\n
Medicare Advantage, which accounts for just 5% of Cigna\u2019s business, grew in the \u201chigh single-digit range\u201d during open enrollment for 2023, which Cigna anticipates will be in line with the industry at large, he said.<\/p>\n
Cordani said digital services could serve as a solution to the physician shortage. After purchasing telehealth platform MDLive, Cigna rolled out a virtual-first primary care health plan for employers in some markets, and early adoption has been high, he said.<\/p>\n
\u201cWe believe fully 40% of all healthcare will be able to delivered virtually\u201d in the future, Cordani said.<\/p>\n
Cigna remains interested in owning virtual care platforms, behavioral health services, specialty pharmacy and home care delivery providers, he said. The insurer is particularly interested in growing its Accredo specialty pharmacy and CuraScripts medication distribution platforms, he said.<\/p>\n
\u2014Nona Tepper<\/p>\n
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5:25 p.m. CT: Newly spun off GE HealthCare\u2019s future involves a lot of AI<\/p>\n<\/div>\n
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GE HealthCare is investing in artificial intelligence and connected devices to further embed its presence in the health system market, CEO Peter Arduini said.<\/p>\n
The company, which spun off from General Electric on Jan. 4, is aiming to grow its AI and connected devices business, Arduini said. GE HealthCare\u2019s biggest revenue generator is its legacy radiology and imaging equipment business, but the AI and connected devices segment is growing at a faster rate and creates recurring revenue, he said.<\/p>\n
\u201cThis is a great business for driving cash,\u201d Arduini said. \u201cIn the next couple of years, we won\u2019t have any products coming out that don\u2019t have embedded AI in them. It\u2019s just the way things are going.\u201d<\/p>\n
Already, GE HealthCare has embedded AI into several applications and products, including new ultrasound and radiology devices.<\/p>\n
\u201cMachine learning is [being used] across the board,\u201d Arduini said. \u201cWe want to index more towards the data because it is a great enabler for the company.\u201d<\/p>\n
While Arduini admitted inflation is affecting GE HealthCare\u2019s bottom line, but said demand for its products remains strong. This is partially due to the backlog of procedures postponed during the first year of the COVID-19 pandemic, he said.<\/p>\n
On Monday, GE HealthCare agreed to purchase Imactis, an advanced radiology equipment manufacturer. Arduini said the company will continue to be active in mergers and acquisition and will specifically seek digital ecosystem partnerships.<\/p>\n
In advance of its fourth-quarter and full-year earnings report, GE HealthCare announced it generated $18.9 billion in revenue for 2022, a 4% increase. The imaging equipment business represented half of that revenue.<\/p>\n
\u2014Brock E.W. Turner<\/em><\/p>\n
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5:15 p.m. CT: Walgreens eyes growth opportunities<\/p>\n<\/div>\n
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Walgreens Boots Alliance sees 2023 as another growth year, jump-started by the Jan. 3 closing of its $8.9 billion deal to buy Summit Health-CityMD. Its full acquisition of CareCentrix is set to close in the third quarter.<\/p>\n
\u201cMy hope for this company and all my executive team is that you\u2019ll see great execution out of us,\u201d Walgreens CEO Rosalind \u201cRoz\u201d Brewer said. \u201cWe have built a foundation on three very strong acquisitions\u2013the Shields business, which really supports what we need to do in our specialty pharmacy, which is one of the fastest-growing areas in pharmacy; our CareCentrix business, which is at-home care; and then the VillageMD business. We have to integrate those.\u201d<\/p>\n
The company hopes to achieve 30% year-over-year growth in adjusted earnings for the second half of 2023, driven in part by fewer COVID-19 headwinds and recovery in prescription volumes. Its full-year guidance, however, still projects lower earnings than 2022.<\/p>\n
As a result of the Summit deal, Deerfield, Illinois-based Walgreens estimates it will achieve $150 million in annual efficiencies by 2027, $60 million of which will be cost savings through limited vendor contract spending, improved processes and automation. The other $90 million would stem from subsidiary VillageMD\u2019s efforts to accelerate Summit\u2019s transition to a more risk-based payment model, Brewer said.<\/p>\n
The company sees opportunities to take on more risk via Medicare Advantage plans.<\/p>\n
Walgreens is also expanding its footprint in multi-specialty care with incremental investments over the next few years and continues to build out its clinical trials business. The company plans to invest in its technology base and incorporate those tools to show how it can reduce healthcare costs. CFO James Kehoe told investors the company is open to future deals to boost its presence in population health and provider-enablement capabilities.<\/p>\n
\u2014Caroline Hudson<\/em><\/p>\n
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4:20 p.m. CT: Northwell expands outpatient network<\/p>\n<\/div>\n
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Northwell Health plans to grow its ambulatory network 5% this year to nearly 900 facilities.<\/p>\n
The nonprofit health system looks to add 22 specialty care sites, 11 primary care clinics and six urgent care facilities this year, according to the company\u2019s presentation.<\/p>\n
Northwell, based in New Hyde Park, New York, is building a $450 million outpatient pavilion on Manhattan’s Upper East Side that’s slated to open in the fall of 2025. The 200,000-square-foot facility will offer oncology, neurology and cardiac care as well as imaging and lab services, chronic care management and wellness services. Northwell partnered with GoHealth Urgent Care last year and expanded its\u00a0Northwell Health at Home program<\/a>, which provides acute care in patients\u2019 homes.<\/p>\n
Northwell also is diversifying its business through its for-profit venture company, Northwell Holdings.<\/p>\n
Northwell Health formed a $100 million partnership with Aegis Ventures last year to try to improve care through digital technology. The joint venture launched a virtual care startup in November, Upliv, which partners with employers to offer telehealth services to women experiencing menopause.<\/p>\n
At the conference Tuesday, Northwell Holdings and Aegis Ventures launched Caire, a national virtual care offering that will incrementally target a specific chronic disease, clinical indication or care gap, according to the presentation. Caire will initially focus on women\u2019s health.<\/p>\n
More than half of Northwell\u2019s approximately $16.5 billion of annual revenue comes from its ambulatory business, Northwell CEO Michael Dowling told Modern Healthcare in November.<\/p>\n
\u201cWe are moving everything out of the hospitals as much as we can,\u201d he said. \u201cHospitals are one piece, a very important one, but they are not the center of the universe anymore.\u201d<\/p>\n
\u2014Alex Kacik<\/i><\/p>\n
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2 p.m. CT: Clover Health reports flat Medicare Advantage sign-ups<\/p>\n<\/div>\n
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Clover Health expects to start the year with the same number of Medicare Advantage members as last year, the company disclosed in a news release ahead of its J.P. Morgan Healthcare Conference presentation Tuesday.<\/p>\n
That means the insurance company likely lost a net of more than 8,000 Medicare Advantage customers during open enrollment for 2023. The insurtech reported 88,136 Medicare Advantage members as of Sept. 30, up from 80,283 at the beginning of last year.<\/p>\n
\u201cDuring the most recent Medicare Advantage enrollment period, we intentionally priced our insurance plans with profitability in mind as opposed to growth,\u201d CEO Andrew Toy said in the news release. \u201cDue to this strategic shift, we expect to start 2023 with insurance membership approximately in line with our insurance membership as of Jan. 1, 2022.\u201d<\/p>\n
Clover Health anticipates generating $1.2 billion in insurance revenue this year. The company aims to spend up to 91% of premiums on patient care, slightly higher than the 85% medical loss ratio required under federal law.<\/p>\n
Toy also reiterated Clover Health\u2019s plan to streamline its clinician partners for the Medicare Accountable Care Organization REACH program \u201cin connection with an increased prioritization of profitability.\u201d<\/p>\n
Clover Health does not need to raise outside capital, Chief Financial Officer Scott Leffler said in the news release. \u201cWe also continue to feel comfortable with the company\u2019s current liquidity position, which helps to insulate us against a challenging market environment,\u201d he said.<\/p>\n
\u2014Nona Tepper<\/em><\/p>\n
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12:45 p.m. CT: Fresenius to shrink clinic footprint<\/p>\n<\/div>\n
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Fresenius Medical Care plans to close some of its U.S.-based dialysis clinics in 2023 as its patient volumes continue to decline.<\/p>\n
Year-over-year, the Germany-based dialysis chain treated 1% fewer patients through the nine months ended Sept. 30 across its approximately 2,700 U.S. clinics.\u00a0Fresenius will shrink its clinic footprint and expand its home care network as it grapples with higher supply chain costs, elevated labor expenses and ongoing COVID-19 challenges, said Helen Giza, who took on the CEO role in December.<\/p>\n
\u201cWe know we need to improve profitability and optimize our portfolio,\u201d Giza said.<\/p>\n
Fresenius plans to trim its clinic footprint in the U.S. and \u201ctake a hard look\u201d at its international markets as the company sees its patient volumes decline, she said.<\/p>\n
Competitors also experienced a decline in dialysis patients, likely indicating that more patients were treated in hospitals or delayed care, Giza said. It is unclear when patient volumes will rebound, she said.<\/p>\n
Fresenius implemented a new operating model in 2023<\/a>, replacing its regional management system with a more centralized structure. The company will look to expand its value-based care programs, particularly among its chronic kidney disease patients, and provide 25% of its dialysis treatments in the U.S. in the home by 2025, Giza said.<\/p>\n
\u201cWe have a competitive advantage in our home offering,\u201d she said.<\/p>\n
\u2014Alex Kacik<\/em><\/p>\n
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12:15 CT: CVS Health looking for ‘the right asset’<\/p>\n<\/div>\n
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CVS Health CEO Karen Lynch said the company was in the market for a primary-care asset but she steered clear of directly addressing speculation the company was exploring an acquisition of Oak Street Health.<\/p>\n
She did not name companies viewed as potential acquisition targets. \u201cWe want to make sure it\u2019s the right asset, at the right time and continue to evaluate options,\u201d Lynch said. \u201cThis isn\u2019t a one-and-done.\u201d<\/p>\n
Citing people familiar with the matter, Bloomberg News on Monday reported CVS was exploring an acquisition of\u00a0 Chicago-based Oak Street Health that would value the primary care provider at more than $10 billion, including debt.<\/p>\n
Much of Lynch’s presentation was an update on subsidiary Aetna\u2019s Medicare Advantage membership enrollment. She said membership grew by low- to mid-single-digits during the annual sign-up period this year. \u201cThis result is due to a highly competitive open enrollment period,\u201d she said.<\/p>\n
Aetna counted 3.2 million Medicare Advantage members as of Sept. 30.<\/p>\n
While Lynch said she was \u201cdisappointed\u201d in the insurer\u2019s ability to capture new Medicare Advantage members, Aetna reported strong sales among customers dually eligible for Medicare and Medicaid and from employers buying\u00a0 group Medicare Advantage plans<\/a>\u00a0for their retired workers, she said.<\/p>\n
The enrollment miss comes as Aetna\u2019s largest Medicare Advantage plan will lose the large quality bonuses<\/a>\u00a0associated with the Medicare Advantage star ratings quality program. That represents a headwind for 2024, Lynch said. \u201cWe\u2019re going to work really hard with our distribution channels, and with our benefit designs, to mitigate that risk for individuals,\u201d she said.<\/p>\n
The insurer has received approval from federal regulators to diversify its main preferred provider organization contract, which will help mitigate some of the risk in 2024, Lynch said. Aetna has also focused on improving members\u2019 experience in its Medicare Advantage plan, which will drive its ratings upward, she said.<\/p>\n
Aetna has experienced a strong open enrollment season among customers shopping for individual coverage on the state and federal exchanges. The company expects to add more than 700,000 new individual marketplace members in 2023, bringing its total to 750,000 exchange lives. Open enrollment ends Jan. 15.<\/p>\n
\u201cThe individual marketplace has had another year of disruption, driving members to select new plans,\u201d Lynch said.<\/p>\n
The company expects to close its\u00a0 $8 billion acquisition of Signify Health<\/a>, a home health and physician enablement technology company, during the year\u2019s first half.<\/p>\n
\u2014Nona Tepper<\/em><\/p>\n
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10:30 a.m. CT: FDA chief calls for better trial access, attention to misinformation<\/p>\n<\/div>\n
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Drug developers, researchers and regulators can do better when it comes to clinical trials, Food and Drug Administration Commissioner Dr. Robert Califf said Tuesday.<\/p>\n
That includes ensuring evidence is properly structured for definitive studies, making clinical trial processes more efficient and routinely using data from electronic health records, Califf said. \u201cThere\u2019s often an assumption that in human clinical studies you can ignore things like missing data,\u201d he said.<\/p>\n
One ongoing challenge is equitable access to research trials, particularly in low-income and rural areas. It\u2019s difficult to conduct specialty research in regions where the relevant services aren\u2019t provided, Califf said.<\/p>\n
\u201cIt\u2019s asking a lot of the clinical research system to overcome structural failures of our healthcare delivery system,” Califf said. “I\u2019m 100% in favor of doing everything we can in the clinical research system to deal with things like inequities in participation in research. But we also need to turn that focus a little bit and say, ‘What is it about our healthcare system that makes it so we start out from that perspective?'”<\/p>\n
Califf noted the Biden administration\u2019s efforts to bring high-speed internet to rural communities, which he said would eliminate a major reason why the researchers don’t recruit\u00a0patients in those areas.<\/p>\n
Califf also spoke of the challenges with rampant misinformation, especially online. The misinformation problem is moving in the wrong direction, and there is no clear path for how to fix it, he said. The FDA needs to be more aggressive in identifying outright lies, which he views as distinct from legitimate dissenting opinions, he said.<\/p>\n
\u2014Caroline Hudson<\/em><\/p>\n
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\n<\/p>\nIn case you missed the conference’s first day<\/a>, here’s a quick rundown of the highlights:<\/p>\n
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Humana added at least 625,000 Medicare Advantage members during open enrollment this year, representing 13.6% year-over-year growth and far outpacing competitors, Chief Financial Officer Susan Diamond said.<\/li>\n
CommonSpirit Health is making progress on its performance improvement goals, pursuing $500 million in cost savings for fiscal year 2023.<\/li>\n
Oak Street Health, the Chicago-based primary-care provider for Medicare-aged patients, has big plans to open new clinics in 2023.<\/li>\n
Teladoc Health’s CEO said the company is better prepared than rival telehealth providers to weather economic headwinds.<\/li>\n
Centene\u2019s exchange business is surging while its Medicare Advantage sign-ups slowed during open enrollment for 2023, CEO Sarah London said.<\/li>\n<\/ul>\n
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\n Modern Healthcare staff<\/p>\n","protected":false},"excerpt":{"rendered":"
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